Senior officials in the Justice Department’s Antitrust Division told antitrust lawyers Wednesday that new guidelines to assess mergers between rivals did not necessarily open the door to more aggressive enforcement.
The officials were speaking on a morning panel discussion at the start of the American Bar Association’s three-day spring antitrust conference.
The new guidelines, released Tuesday, outline how the DOJ and the Federal Trade Commission will decide whether so-called horizontal mergers violate antitrust laws. The revisions update a set of standards largely untouched since 1992.
The document, as expected, moved away from a formal, step-by-step approach that begins with defining the market in which the merging companies operate. In the past decade both agencies have lost merger challenges in court, hamstrung in part by their own guidelines.
Antitrust Division deputies Scott Hammond, Carl Shapiro, Bill Cavanaugh speak at a panel discussion at the ABA's Antitrust Conference (photo by Aruna Viswanatha / Main Justice)
The revisions highlighted other methods, including newer economic concepts, to analyze the competitive effects of a merger. The change could potentially make it easier for the agencies to challenge mergers.
The Antitrust Division’s top economist, Carl Shapiro, told the bar not to worry. “We will always define a market,” he said, “but we can put more weight on other types of evidence.”
The revisions reflect changes in agency practice since the last updates, Shapiro said, to make the process more understandable to a general audience.
The economic concepts are not new to the guidelines, but more fleshed out, he said. Molly Boast, Deputy Assistant Attorney General for civil enforcement, echoed the sentiment. It would be a “mischaracterization” to say the revisions “give them greater prominence,” she said.
At the session, Boast also fielded questions about the Justice Department’s interaction with its European counterparts. After an unusual public disagreement concerning the review of database provider Oracle’s purchase of Sun Microsystems last year, the DOJ hired a new international adviser, Rachel Brandenburger, to help coordinate the two authorities.
Boast said Brandenburger attends all litigating section meetings and works closely with staff lawyers to make sure they stay on the same page as European Commission attorneys. The deputies also hold video conferences with their counterparts regularly, Boast said.
Boast called the dispute over the Oracle-Sun review “more an accident of time frame.” The European Union issued a set of objections to the deal after the Justice Department had already signed off on the proposal.
When both agencies cleared a Cisco deal last month, the E.U. developed a remedy that satisfied the DOJ, and both regulators concluded their investigations at the same time. That took a lot of daily contact, Boast said.
The division’s top litigator, William Cavanaugh, also fielded questions about the most closely watched deal the new administration has reviewed to date — the merger between ticket giant Ticketmaster and concert promoter Live Nation, which DOJ approved in January.
Because the merger was largely a vertical one and the settlement involved several prescriptions of conduct by the parties, the panel’s moderator, Fried Frank’s Bernard Nigro, asked whether the Ticketmaster case opens up the possibility of increased scrutiny of vertical mergers and behavioral remedies. Cavanaugh stressed that the Justice Department was most concerned with a horizontal overlap on the ticketing deal.
On the entertainment front, Boast also answered a question on the impact to the antitrust bar from the movie, The Informant, which starred Matt Damon and told the story of a price-fixing cartel. “It was great for staff morale,” Boast said.
